Sunday, 25 November 2018

Another Fine Mess Olly!

[Warning...this is a lengthy article about Brexit and the withdrawal agreement. It is not about investing so please feel free to click on to your next site if you are fed up of Brexit].

The EU heads gathered today to sign off on the proposed Brexit deal hammered out over the past two years. All I would say is the whole process has become an omni-shambles of the highest order.

It got off to a promising start when Mrs May gave her LancasterHouse speech which set out the Governments priorities for the Brexit negotiations

The objectives were clear and well received - take back control of our laws, controls over immigration and an end to freedom of movement, leave the single market, freedom to strike our own trade deals and a smooth and orderly transition which would entail a broad agreement on our future partnership by the end of March 2019.

This was January 2017 and it seems it has been downhill since then.

Civil Servants

(I've printed this image on my punchbag...it helps a little)
Of course, much of the day to day negotiations have been conducted by our civil servants. Mrs May appointed Olly Robbins as her chief negotiator. At the start he was head of DExEU but later transferred over to the Cabinet Office to work more closely with the PM. Robbins was well known to the PM as he was a senior civil servant in charge of immigration when Mrs May was at the Home Office. Robbins is her closest confidante on Brexit and the person she most relies upon so he enjoys the most powerful position.

Of course he is supposed to be politically neutral but he was president of the Oxford Reform Club which promotes a federal European Union and is therefore a committed Europhile which puts into question just how impartial he could be in the role of negotiations to leave.

He has been assisted by Sir Tim Barrow who took over following the resignation of Sir Ivan Rogers who accused the government of muddled thinking

For the EU, Sabine Wayand has done much of the hard work as deputy to Michel Barnier. She has 25 years experience in trade negotiations and is well acquainted with the UK having studied at Cambridge in the 1980s



Some people suggest the civil servants led by arch remainer Robbins have been working hard to stitch up the Brexit process by skillful manipulation to end up with a last minute 'deal' which is being sold as delivering what we voted for but in reality will mean very little changes. To some it appears that Robbins has been gradually softening up the PM by willingly accepting the EU lines and persuading Mrs May we have little alternative. Of course he would be pushing lines upon which another remainer would not need much persuading.

The NI Backstop

One of the biggest obstacles to progress has been finding a solution on how to avoid customs checks and a hard border between Ireland which will remain in the EU. Obviously whilst the UK has been a member it has not been a problem but now we are proposing to leave the customs union and single market, the two parts of Ireland could have different taxes, tariffs and regulations which would need to be checked at the border.

In 2017, in order to make some progress, both sides agreed to the backstop which means if no solution can be agreed during the future trade negotiations after we leave, then NI would remain in the EU customs union and parts of the single market and would therefore be treated very differently to the rest of the UK. 

Scotland who wish to remain in the EU could argue that if it applies to NI why not them? This could be very damaging for the unity of the UK. Obviously the DUP are opposed to any measures which treat NI differently and their leader says they will  vote against the current deal.

The WA if accepted, would invoke the NI Backstop Protocol which runs to 175 pages (of the 585) and basically ensures that if no agreement is reached during the transition period (or two year extension), then the whole UK stays in the EU customs union and subjects NI to a raft of single market directives and regulations. If it comes into play we have no way to exit without the consent of the EU so they have a veto. President Macron has indicated he will use the threat of the backstop to get a good deal on fishing and other countries will use this leverage to get what they want in the future negotiations.

We are effectively prevented from striking trade deals around the world whilst the EU hold all the aces in the future trade negotiations knowing that if we do not agree, they maintain access to the UK markets whist keeping us tied to the EU.
We could end up being locked in for many years to come.

The future relationship document (not legally binding) offers warm assurances that both sides are 'determined to replace the backstop' but I fear the EU would say anything to get the WA agreement in place.


The Withdrawal Agreement

On 15th November after much speculation that it was getting too late to reach an agreement...ta daa...the final draft of the WA is presented to No 10 and there is an emergency cabinet meeting called to ensure they are all on board. Bear in mind this is a document stretching to 585 pages of complex legalese text equivalent to reading 'War & Peace'. Ordinary people are not intended to read these documents. I am sure this was intended - keep it complex and deliver at very last minute...

The important point is that if we accept it then we have no way out...we will be stuck with it unless the EU agree to a replacement agreement...there will be no get out clause or cooling off period.

The basic proposals include hand over the £39bn to cover the transition period to end 2020 which may be extended to 2022 without knowing what, if any, trade arrangements will be agreed. Stay in custom union until new agreement on trade is reached failing which we enter the 'backstop' arrangement which ties us into the CU indefinitely unless a 'joint committee' sets us free. Being in a customs union means we continue to pay the EU an additional £30bn for the extra two years and also prevents us from striking our independent trade deals with non-EU countries

NI would be treated differently to the rest of the UK and would be more closely aligned to Dublin rather than London.

The ECJ has jurisdiction over the withdrawal agreement including transition period(s), the potentially permanent backstop arrangement as well as the financial settlement

The deal would undermine and seriously compromise the integrity and sovereignty of the UK and is a far cry from what was set out at Lancaster House. If the Commons vote for the deal, it will bind us to the EU for an indeterminate period, will remove any independent control and hand it to a 'Joint Committee' who have exclusive jurisdiction to implement all aspects of the WA for up to four years after the end of the implementation period and settle any disputes. Any unresolved matters can only be resolved by the ECJ. This JC will alone decide on any extension to the transition period.

Our PM talks about taking back control of our laws and sovereignty...dream on!

The Future Agreement

First question...why has it taken over 2 years to thrash out the WA and just a week to sort out the future relationship?

It looks like all our obligations, including payment of £39bn and probably a further £30bn due if we enter an extended transition, are nailed down in the 585 page legally enforceable WA whilst all the potential benefits of our future trading arrangements are set out in this 26 page framework document... which is not binding and has no legal standing whatsoever.

I cannot for the life of me understand why this part of the process has to be left until after we have left on 29th March. How on earth are we supposed to take a view on the withdrawal agreement before we actually have some degree of certainty what our future relationship will be like? This means our MPs are being asked to vote on a 'deal' with only the sketchiest of understandings of the future set out in this political declaration...which is not binding and the EU could easily backtrack on.

The PM must have agreed to go along with this arrangement at the outset so I guess she must take responsibility. This has to be a serious mistake but I have not read much commentary so far.

The framework is full of aspirational words and could be interpreted as giving every party some of what they require. It aims for a future agreement which balances rights and obligations. The more we want to maintain close ties with the EU, the more we will need to accept their rules and submit to the EU courts in the event of disputes.

Importantly, it contains a commitment from both sides to 'build and improve upon the single customs territory' provided for in the WA. This is not of course binding but the EU would have no moral duty to agree a trade deal which permits the UK freedom to pursue its independent trade policy with the rest of the world.

The aim is to start negotiations after we formally leave on 29th March 2019 and hopefully enter a formal agreement by the end of the transition period end 2020. We have the option to extend the transition period by two years to end 2022 (which takes us after the next election in May 2022). If the future relationship is still not agreed then the backstop arrangements kick in which keep us in the CU and tied to the EU without the ability to unilaterally pull out.

This gives the EU a very clear advantage throughout the negotiations.

I think there is no doubt the establishment have deliberately set out to undermine the Brexit process and appear to have succeeded. Having a concerted fear campaign before the referendum vote in 2016 which most people treated with contempt, our Wesminster elite have ramped up the fear factor for no deal to maximum so our politicians are now facing a vote on whether to accept the deal presented by May & Robbins without any clear promises on the future trade agreement or reject the deal which may result in leaving on WTO rules.

To be honest, I would rather take my chances with a clean break and WTO rather than remaining tied to the EU with no say in future policies. The current deal offers the worst possible solution - legal obligation to pay £39bn, not out of the EU, continue to pay more in, split off NI, subjected to EU courts and unable to strike our own trade deals.

The establishment offered the people a vote and when it did not turn out the way they wanted, they have worked hard to find a way to keep the UK so closely aligned that it will feel no different to when we were still a member.


Conclusion

I am left wondering how we could possibly get things so wrong. What do we have after two and a half years? May and Robbins have led everyone along the proverbial garden path and here we are with no time left having to decide on a crap deal which pleases neither leave or remain supporters. For the EU it would be a tremendous outcome.


To be honest, I would not be surprised if Robbins deliberately made the deal so bad that nobody in their right mind could possibly accept it and calculated this would eventually result in a second referendum and the people voting to remain after all...far fetched possibly, but...

The big mistake was allowing a staunch europhile like Robbins to take charge of negotiations...that said, I guess there are probably not many top civil servants who voted leave...

This feels embarrasing and humiliating. We could have said to the EU after June 2016  'Look, we are leaving the EU however we really would like a free trade deal and we are sure you probably would too so lets see what can be agreed. If we cannot find agreement then we will arrange to leave on WTO rules'.  The basics could have been established in a couple of months.

I honestly cannot believe our MPs could vote this through...they have set aside 5 days for the debate culminating in the big vote on Tuesday 11th December. This is not so much a bad deal more an atrocious deal. The PM needs 318 votes to get it over the line - a significant number of her backbenchers say they will vote against, the DUP, Labour benches and SNP so my best guess is she will be at least 70 short.

If they vote down the deal, which surely they must do, the default position is that we leave on 29th March on WTO rules. However, they also want to avoid a no deal so they may consider another vote which is made conditional on the outcome of a referendum. Parliament could also ask the EU to postpone this date whilst we had another general election.

The proposed deal would be nothing short of capitulation and surely few people - whether remain or leave - believe Mrs May when she says we have delivered on Brexit, taken back control of our borders, our laws and money, free to negotiate our own trade deals around the world.

We have wasted the past 18 months getting to this point and, as I said in July following Chequers, I honestly cannot see a good outcome from where we are now. We are facing a political and constitutional crisis and our PM and her cabinet colleagues along with senior civil servants should hang their heads in shame (but of course they won't). There will no doubt be inevitable unintended consequences flowing from this betrayal from those in many parts of the country who will be left once again feeling alienated, let down and ignored.

This feels like the end of the beginning - it will run and run...aaagghhh...

Personally, I don't much care anymore - I probably should have known better but feel badly let down by our politicians and the way I am feeling at present, will not take part in future elections. It seems whoever you vote for, the political elites always have their way. It was probably ever thus....

I am sure if you have read this article you probably have a view so feel free to leave a comment below. Should we go along with the deal to bring the uncertainty to an end? What should happen if MPs vote against the deal?

19 comments:

  1. My prediction is that the initial document of surrender will be rejected by Parliament, then a few pre-agreed amendments will be thrown in to 'save the day' and make it palatable in a second vote. What is passed will not be Brexit in any way, shape or form, which was always the intention. The EU has and always will be undemocratic, intractable and dictatorial and instead of walking away, the UK has simply given in and given up. Shameful.

    ReplyDelete
    Replies
    1. Quite possible but I don't see any amendments that will get around the backstop issue which is causing all the problems. This is the ace card for the EU - they know it, we know it and I cannot think of a solution.

      Delete
    2. There was only ever going to be one solution, which is what they are now pejoratively calling no-deal. Apparently, though, that would spell disaster. Presumably the same kind of disaster as not joining Euro, not voting remain, etc, etc, etc. The Irish border has solutions, but it's very useful not to look for those if your plan is to keep the UK locked-in indefinitely.

      Delete
    3. The EU is looking after its interests, as I would expect it to.

      It is 'democratic' -- we voted out, the rest of its members have implicitly voted to stay in.

      It's not for the EU to make Leaver pipe dreams come true. Fair enough from that POV to blame the British government if you like, but totally ludicrous to blame the EU for something we foisted on them, or to complain when they look after their members.

      Delete
    4. I certainly do not blame the EU for negotiating the best deal for its members. I am sure it is fearful other countries may be thinking of following UK out of the door.

      The blame for this fiasco lies squarely with the UK. Whist having to pay lip service to the referendum, the establishment have never been on board and seem to have worked hard to undermine the process and it is looking increasingly likely they will succeed in reversing the decision.

      Barry Blimp must be furious!

      Delete
    5. The only pipe dream is the EU itself.

      Delete
  2. Replies
    1. Thanks. I caught some of the debate in Parliament earlier today...there seems to be no appetite whatsoever for the deal but the PM is not backing down and sticks to her mantra...delivers on Brexit, take back control of money, borders and laws. The debate proper starts 4th December with final vote following Tuesday...wonder what PM will announce on Weds?

      Delete
  3. I agree that it seems ridiculous that it has taken so long to get to this stage, but that is politics. But in terms of what it represents, it is totally unreasonable to assume the fantasy Brexit advertised by Johnson and Farage was ever even a remote possibility. It was always going to be a compromise that all parties could just about sign up to as the "least worst" outcome. This may really be the best deal available.

    One problem is the illusion is that the UK is a "big" nation – the reality is that we have had major international influence because for the last 40 years we have been part of one of the handful of super-powers. This is the first negotiation to face the reality that on our own we are in a weak position compared with the big boys. You can bet your life that once we start negotiating ongoing trade deals with the US and China we will similarly find those are massively tilted in their favour.

    Some people ask what is wrong with a no deal Brexit. Someone, possibly Rees-Mogg, claimed it could provide a better outcome long term after an initial "hiccup". From the long term perspective of history that is possibly true, but for any companies that do international business the temporary (at least 1-2 year) disruption to supply chains and markets through WTO tariffs and customs checks will lead to huge problems and in some cases bankruptcy. And the rest of the economy will then suffer from the domino effect. It isn't something any responsible government could consider, and is only proposed by back-benchers whose political aim is their own self-promotion.

    I fully agree that it is difficult to see Parliament backing the deal, though presumably May thinks there is a possibility however remote. The question is what happens if they don't. Neither can one imagine Parliament backing no deal, and according to May the only other alternative is no Brexit. MPs though won't be comfortable with overturning the referendum result, so the Liberal proposal of a new referendum may end up on the table too.

    Jonathan

    (I am signing this because while I used to be able to comment on this website under my own name I can't now rediscover how to do it without possessing a personal website)

    ReplyDelete
  4. Jonathan,

    Thanks for your comment - it sounds like you would possibly go along with the deal but recognise it will not get past Parliament.

    Having had a another day to reflect, I think for me, the main stumbling block for many MPs is the NI backstop provisions which would see NI treated very differently to the rest of the UK and I have a lot of sympathy with the DUP who say they were given assurances by the PM which have not been kept.

    Even if the backstop was never triggered, the fact that it is a possibility to end up there would give the EU a big advantage in the future trade talks.

    The EU have said they really do not want to use the backstop and we certainly do not want it so, maybe when this gets voted down, the EU could take another look at it in an attempt to find something that would be acceptable to the majority of our MPs.

    I just do not see how a second vote will resolve these issues. It will just prolong the agony for another year.

    The drama continues....

    ReplyDelete
  5. Yes, I am not keen on the situation at all but we might have to be pragmatic. A lot of international agreements take a lot longer than this to negotiate, there are unlikely to be any more than very minor tweaks possible now.

    I can see why MPs don't like the backstop, but the need for something to protect the Northern Ireland peace agreement was made explicit a year ago and presumably was evident in discussions long before that. Despite the blustering of Boris Johnson et al they haven't come up with a practical alternative (and Johnson had the resources of the Foreign Office to search for solutions).

    I see exactly what you mean by another vote just prolonging the issue – after all the first one was invented by Cameron as a way of quietening down divisions within the Tory Party and actually it made things worse. However the problem is that the UK is not a country that makes decision by referendum, it is a representative democracy, and there is no established constitutional way to revisit the issue. MPs recognise they would appear to lack legitimacy if they propose a new solution, and if there isn't a majority for a way of moving forwards with Brexit the only solution getting cross party support might be a return to the country.

    Actually it shows up why referenda are problematic. They really need to be a vote on a specific proposal. The last one was ill-defined and could be painted by Brexiteers as leading the country to prosperity and international prestige, without needing to be realistic about what might ensue. (But the failure wasn't all on the Brexit side, the Remainers didn't point out all the positive benefits of being in the EU that business leaders have subsequently been reminding us of).

    Jonathan

    ReplyDelete
    Replies
    1. Yes, I agree referenda can be problematic...especially when the outcome is not one which is acceptable to our establishment elites. I think this is really at the heart of the chaotic situation we have now reached. The way out? Ask the people again and hope they come up with the correct answer next time.

      Delete
  6. Yes, that is my reluctant conclusion because I don't really like referenda. But with the only realistic Brexit on offer being recognised as unsatisfactory to the extent Parliament is unlikely to support it, the only way out would be to put it in a referendum. It would be made quite clear these are the only options available. I think the rest of the EU would accept a request to pause the Article 50 process as long as the remain option was in the vote.

    If the country wants May's deal on balance, then whatever MPs think it would acquire the legitimacy to be carried forward.

    What fascinates me at the moment is the other politicking around it. May is touring the country and proposing a television debate – something that only makes sense in terms of a public vote. (In fact she is prepared to go further in selling herself to the public than she did for the last general election). Labour continues to sit on the fence but make background noises about a new general election or referendum; I think basically it is waiting to see which way the wind is blowing and then try to hijack that bandwagon. Corbyn was apparently on the Remain side in the referendum but has been painted as a closet Leaver – I suspect actually that Europe is something he doesn't have strong feelings about and if Labour had won the 2015 election he would have simply carried on the status quo relationship with the EU. However he is quite happy to use something that the Tories find awkward to his political advantage.

    Jonathan

    ReplyDelete
  7. I suspect the problem is that there were at least two big distinct Leave sets of supporters. One was concerned with immigration and jobs, the other with sovereignty and control of trade and the legal system. Sure there were others that didn't like brown people on the streets or hearing Polish, but they were probably not too large.

    The trouble is that the interests of these two large Leave groupings are orthogonal. To broadly simplify, Jacob Rees-Mogg doesn't give a toss about the proles' jobs and is not overly exercised with immigration. The citizens of Boston Lincs aren't that troubled by the ECJ or high-falutin trade policy arcana but are really worked up about the fact there aren't entry-level unskilled jobs in their town.

    So we have a binary vote covering a three-way split, which is why nobody's happy with the result I guess, three into two won't go.

    ReplyDelete
    Replies
    1. Ermine, good to hear from you.

      Agreed there are several sets of Leave voter - immigration for sure, sovereignty another big one and certainly two fingers to project fear from the likes of Carney, Osbourne and Lagarde.

      However, regardless of the many reasons for the leave vote, when the dust had settled, the process is taken up by the PM and civil servants and this is where the problem arises in my humble opinion. The establishment elite are not having Brexit period and they have systematically undermined the so called negotiations over the past 18 months. If May had been seriously on board, which I must admit with Lancaster House I thought she was, then why on earth would she put Robbins in charge? Like putting a fox in charge of the hen house (except the chickens would stand more of a chance of getting out than we do). Our chief negotiator has found ways to put the EUs demands to may and gradually persuade her to accept them.

      I think we are nearing the point that Brexit voters from whichever camp will be coming to the realisation that their dreams have been crushed and maybe wondering why the establishment offered the referendum and promised to implement the decision....such a cruel joke!





      Delete
  8. I'm from Northern Ireland, living in the UK (Scotland - and that's a whole different story) and my wife is Russian (now with British citizenship).
    We are genuinely considering moving away from the UK and cutting our ties. There's a lot to dislike about Brexit and I don't think that anyone at this point is saying that there are any actual benefits.
    What a mess!
    Referendum or not - I'm sure that many people will vote with their feet.

    ReplyDelete
    Replies
    1. Sorry to hear you are thinking of leaving. Where would be you first choice for relocation?

      I agree there is much to dislike and I would suggest much of this stems from the governments approach to the negotiations. I think most people would agree it could have been handled much much better and if it had, then maybe we could have avoided a lot of the chaos we are now landed with.

      As to benefits and contrary to what you say, I have heard many people talking about the benefits but I guess this will to some extent depend on who you are prepared to listen to.

      Good luck with your move if you decide to leave.

      Delete
  9. Just a quick question, you talk about the "establishment". What do you mean by this? From what I read at the time, the Queen was in favour of Brexit. So were Lamont, Howard, Lawson and countless other Tory grandees. So too Corbyn, leader of the opposition. Talk of elites and establishments worries me because it seems to be going down the road to loss of faith in government. That is the way to civil disorder, which has never seemed very English. We don't want French-style yellow-shirted thuggery in the UK, surely?

    But, it is clearly a rotten deal and May seems to me to have merrily given away all of the potential economic benefits of Brexit in return for one thing: keeping the foreigners out. Everything else has been surrendered, including sovereignty (ironically). Yes, before this deal we were actually leaving the EU. We might never be able to after it. Great work PM!

    ReplyDelete
    Replies
    1. I use this shorthand expression to indicate what I consider to be the power brokers of the day - obviously prime minister and chancellor, senior civil servants particularly in cabinet office close to PM and treasury close to chancellor, some senior heads of business senior bankers and financiers, also influential figures in the media. These people are well-connected and tend to have friends in high places and look out for each other.

      Then we have the rest of the population who could never be classed as establishment - some who would have been described as working class and others as middle class or aspirational but on the whole just ordinary people who make up the other 99%.

      So long as the establishment pay lip service to democracy and give the appearance of carrying out the wishes of the majority, then the status quo can be maintained but offering the Brexit referendum with the promise to implement the result turned out to be a miscalculation and may have very unintended consequences if at the end of all this we end up with no Brexit.

      I think the referendum has exposed some of the deep resentments and divisions which have been simmering for some time and which were exacerbated by the global crash and MPs expenses scandal where people who feel left behind and disenfranchised witnessed a certain priviledged few benefit whilst they bore the brunt of the fall-out for years.

      Surely the result of the referendum cannot have come as a complete surprise?

      Delete